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Cape Town - Since the ANC presidential election there has been a lift in confidence levels across corporate and retail customers, which is favourable for the banking sector, according to Mike Brown, CEO of Nedbank Group.

He told Fin24 on Tuesday that the South African banking environment is intensely competitive. New competitors likely to come onstream - for instance Discovery Bank and Bank Zero - will keep the big banks on their toes which, he believes, is healthy for the banking system.

In September last year Bloomberg reported that Capitec had overtaken Nedbank as SA's 4th largest bank by value. Asked about this on Tuesday, Brown said that was true only for a period last year. Nedbank's current market cap is just over R150bn, compared to Capitec's R100bn.

"Clearly Capitec has done well over an extended period of time, but its share price has been under pressure more recently for various reasons. Nedbank is a universal bank, while Capitec is largely a consumer-focused personal lending bank so its performance will be more correlated to either headwinds or tailwinds in that market.

Brown said Nedbank has invested significantly over time in building foundations for its IT systems that enable the bank to be more agile and more digital.

"We are at an exciting time of that journey. After years of building the 'foundations', our 'house' is now visible with new products for customers," he said.

Examples are the Nedbank Private Wealth app - rated among the top 6 in the world among private banking apps – and a new Nedbank retail app, which has had nearly 400 000 downloads since launch late last year.

In the next few months all Nedbank's internet banking sites will relaunch to look just like its new mobile offering.

By the middle of the year client on-boarding in current accounts and personal loans will be simplified and people could sign up remotely on a device including KYC (know your client) requirements without having to go into a branch should they so choose.

Lastly, towards the end of the year, Nedbank will be launching a new client-centric loyalty and rewards programme.

Asked about the resilience of the bank during a year like 2017, Brown said the focus for all “Nedbankers” remains on serving customers' needs and in so doing building a stronger Nedbank franchise. In the volatility of 2017 he was particularly pleased with the performance of the very experienced enterprise-wide risk management capability across the bank that stood it in good stead during credit and market risk events 2017 in SA.

The bank's ability to collect debts and a resultant low credit loss ratio was also seen as a strong point by Brown and he said a lot of time was spent on some customers in distress to restructure balance sheets and enable businesses to get back on a sound footing.

"We had an excellent risk management performance in 2017 and our retail banking also had a good growth and now 7.5 million customers choose to use some Nedbank product - and we continued to have a tight focus on our cost base, especially in the retail business" he said.

Asked about the impact of SA's downgrades by ratings agencies last year, Brown said Nedbank had expected that there was a probability of this happening and, therefore, positioned itself beforehand to deal with these by building both capital and liquidity. That led to the sovereign downgrades having almost no impact on the bank or its funding costs.

"It is very important for SA to maintain its Moody’s investment grade rating, with an announcement expected before 24 March. We are confident that, given the improvements in SA since November in terms of institutional strength, plans to deal with the fiscal deficit, initial steps to put Eskom in a better position particularly in respect of governance, and better than expected GDP growth in 2017 and beyond, a downgrade by Moody's will be prevented," said Brown.